Have you heard of the boiling frog fable? If not, here’s how it goes- if you put a frog in boiling water, it will immediately jump out but if you put the frog in tepid water and gradually bring the water to boil, the frog will not perceive the growing danger and will be cooked to death. While we can’t support the veracity of this claim, the metaphor aptly describes the inability or unwillingness of people to react to gradually rising threats.
As it turns out, many of us aren’t faring much better than the frog. We have all grown up with technology, using multiple devices, troubleshooting computer problems at home, and even setting up home networks. So it is natural to feel comfortable around technology at work. However, the technical complexities of the office infrastructure are exponentially higher than that of home networks due to the large number of devices, applications, and technologies used. It’s getting hotter and you don’t realize it until your lone IT person bails or you have a major security breach.
Thankfully, the situation doesn’t need to be so dire. The typical IT challenges that small to medium businesses face can be solved by using a Managed IT Services provider. In this blog post, we will talk about managed IT services and the role they can play in the success of your company.
What Is Managed Services
Managed services is the practice of outsourcing a business function or process to improve operational efficiency and cut expenses. Managed services are also ideal for maintaining a lean and agile enterprise. A managed service provider (MSP), therefore, is a company that manages the outsourced function or process, while the client retains the functional oversight.
Managed services use a subscription model and are different from on-demand service models. The client and the MSP are bound by a contractual agreement, which is ideal for both the parties- for the client this ensures better performance and quality of service, while for the MSP this ensures long-term relationships and steady revenue.
Another point of difference is that MSPs work on a proactive basis instead of the break/fix model of on-demand services. The proactive approach is beneficial for the client as it prevents downtime and ensures high availability of their service or product.
Some commonly outsourced functions are;
Information Technology and Information Systems
Human Resources
Accounting and Payroll
Marketing
Supply Chain Management
What Is Managed IT Services
A Managed IT Services is an outsourced business partner to whom companies can delegate their IT projects, operations, and management. Managed IT services, therefore, allow businesses to focus on their core activities by taking non-core functions off their plate.
Managed IT Services, which are also referred to as Managed Service Providers (MSPs), manage their clients’ information technology infrastructure and/or end-user systems under a subscription model.
MSPs initially focused on remote management and monitoring (RMM) of networks and devices but now many of them offer a wide range of services including cybersecurity and compliance, technology consulting, and cloud services. The clients can delegate the entire or part of their IT operations to an MSP specializing in handling such responsibilities. The scope of work is agreed upon in a Service Level Agreement (SLA) and can also include IT equipment procurement.
Pricing models for MSPs
Managed IT services operate under different pricing models; the most common are:
Per User
Per Device
Flat fee per month
Hourly
There isn’t one best pricing plan, so it shouldn’t be the most important consideration. Although, how much you pay monthly will be an important consideration; we’ll talk about cost vs benefit later on in this blog post.
Benefits Of Managed IT Service
Managed IT services deliver more benefits than is apparent to a casual observer. Some of their immediate benefits are:
1. Reduced Costs
Hiring, training, and retaining IT staff is expensive and temporary employees don’t always live up to expectations. Outsourcing lets you budget effectively by reducing human resources and administration costs. This is especially beneficial for small and medium businesses that usually have limited resources.
2. Improved Quality Of Work
Managed IT services maintain a roster of highly qualified and certified professionals who go through rigorous training and certifications. This ensures that the clients receive the best service. No matter how much they are trained, in-house IT employees are restricted to the confines of their company and are not exposed to the variety of IT issues that businesses face.
Even though there are ample resources, videos, and tutorials online, there is nothing that trumps experience. Since MSPs work with multiple organizations, they will have encountered a plethora of problems and IT challenges, the lessons learned from which are instantaneously passed on to new clients.
3. Timely And Efficient Implementation Of Projects
Outsourced IT service providers maintain all the necessary resources required for starting IT projects right away. This includes not only consultants and engineers with the right skills but also long-standing relationships with equipment suppliers that ensure lower lead time for equipment delivery.
Irrespective of the scale or complexity of your project, experienced MSPs can deliver it in a much shorter time than an in-house IT team. This is because chances are, the MSP has already delivered a similar project in the past for another client. Using the experience of the MSP, you can significantly cut down on your research, development, and deployment time.
Faster projects mean a quicker time to market, which can be the difference between the success and failure of your product or service.
4. Competitive Advantage
Small and medium business owners on their own can never match the in-house IT competence of large companies. The cost of maintaining an IT department staffed with specialists in Security, Network and WiFi, Cloud, Hardware and Software, and all other requirements of modern businesses is unimaginable for small and medium business owners. However, outsourcing IT operations and management enables small businesses to act “big” as the MSPs provide them with the same level of expertise and technology support that larger companies enjoy.
5. Improved Security And Compliance
Managed IT service providers manage much of your business risks as they are aware of the industry standards and requirements. By outsourcing your IT security to a managed service provider, you can rest assured that your IT security risks are minimized. Further, your MSP will also be better informed about the regulatory compliance requirements of your industry and therefore will be able to help ensure compliance.
If you are already working with an MSP but aren’t getting these benefits, you should consider switching to a different Managed IT Service Provider.
When To Hire A Managed IT Service Provider
The ideal time to hire an MSP is before you actually begin to feel the need. But there are some telltale signs of when you need external IT expertise. Here are some:
Your company has suffered an IT security breach more than once in the same year.
The productivity of your best employees drops.
You are always firefighting IT problems, running from one issue to another.
Your investment in technology isn’t giving you the planned return on investment.
Your IT projects are usually behind schedule
We’ve discussed these signs in detail in a previous blog post: 7 Signs Your Business Needs IT Support
Many business owners and managers shy away from outsourcing because they view it negatively. This is very surprising because outsourcing has been instrumental in the success of many popular companies such as Groove, UpWork, Slack, and GitHub. Once you have identified the need for external IT support, the decision to hire an MSP should simply come down to cost vs benefit.
Cost vs Benefit Of Outsourcing
Sustainability and growth of business require effective management of resources. All the different business functions such as operations, HR, marketing, etc. will be vying for the same limited pool of resources. Therefore, it is important that your arguments for hiring an MSP are backed up with a solid business case, i.e. you need to demonstrate that your investment will bring a high return on investment (ROI). If you would like to delve deeper into this topic, I suggest reading our previous blog post on Managing IT Finance.
Determining the ROI of IT support may look straightforward but there are nuances you need to keep in mind. The traditional ROI calculations won’t give you the real picture because many benefits such as time savings, increased efficiency through the quality of life tools, reduction in downtime due to proactive IT support, etc. aren’t included. Such benefits aren’t used in traditional calculations as they don’t bring direct cash flow. But such non-traditional benefits can be used if you are able to quantify those benefits. Here’s an example showing how to calculate the real savings from outsourcing IT support.
In addition to the financial benefits, you also need to consider other aspects of outsourcing. Cheapest usually isn’t the best and there are valid reasons for that. Here are a few more things to consider before hiring an MSP:
Quality Of Work
The quality of the outsourced work should match your standards. You should be able to take pride in what you see because, at the end of the day, it is you or your company that is associated with the work. SLAs are a good way to ensure the quality of work but that doesn’t always work. So do your research, references from the current or former clients of the MSP as well as their online reviews are great indicators of quality.
Location Of MSP
Do you need on-site support, an off-site helpdesk, or a combination? Being open to off-site or remote workers opens up doors to a wider pool of talent that would otherwise be impossible to reach. Technology has made collaboration over long distances and different time zones a lot simpler and at times seamless. However, if you need even a small amount of on-site time, it is best to find a local MSP, otherwise, it will be a pain to have separate service providers for onsite as they won’t be familiar with your systems, settings, and requirements. This unfamiliarity will cause unnecessary delays and longer downtime.
Culture Fit
If you intend to work long-term with a consultant or service provider, it is imperative that their culture is congruent with that of your organization. If their business values are different than yours, behavior and attitude conflicts will cause friction and slow down your progress.
When To Stop Using Managed IT Services
Although most managed IT service providers may not tell you this, but there may come a time when you should stop using an MSP. A good MSP will not only inform you before you arrive at that juncture but will also help you with the transition, assisting with setting up your internal IT department.
Once you have grown large enough to afford an internal IT team, you probably should start building an in-house IT team. However, this shouldn’t be sudden. You need to keep sufficient overlap so that the transition from the MSP to your internal team is smooth and all knowledge is completely transferred. Nevertheless, you don’t have to completely bid goodbye. MSPs will still be of value to you when used for fixed-term projects, external audits, and as a supplement to your in-house IT team.
Conclusion
For most small and medium-sized companies getting IT off their plate is highly beneficial as it allows them to focus on their core competency. The technology landscape is dynamic and constantly changing. Without a competent IT team, businesses can easily get overwhelmed by the various technological challenges that they will undoubtedly face.
Considering how integrally IT fits into your business model and strategy, it is quite obvious that information technology has a huge bearing on the sustainability and growth of your company. After quantifying the costs and benefits that an external team of IT professionals can bring to your company, it becomes easier to decide if you should hire a managed IT services company.
Whether you decide to retain IT in-house or hire an MSP, you need to be equipped to navigate the changing technology landscape in order to be competitive and grow.
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About The Author
Hari SubediMarketing Manager at Jones IT
Hari is an online marketing professional with a focus on content marketing. He writes on topics related to IT, Security, Small Business, and Mindfulness. He is also the founder and managing director of Girivar Kft., a business services company located in Budapest, Hungary.